Czech President Petr Pavel said on Wednesday he would sign a bill slowing down an inflation-linked pension hike, a bill the ruling coalition pushed through to relieve pressure on budget at the time of soaring inflation. The centre-right government of Prime Minister Petr Fiala has said the bill would save around 20 billion crowns worth of spending in the central budget, currently planned with a 295 billion-crown deficit this year. The change has to be implemented by late March in order to prevent the faster pension hike which would kick in automatically in June. The bill is the government’s first tangible move to rein in the exploding budget deficit. The central state budget showed a record gap of 119.7 billion crowns in the first two months of 2023, due to soaring welfare payments and energy price subsidies. The pension adjustment bill was approved in a rushed procedure earlier in March and after a fight from opposition lawmakers. The main opposition party said it will challenge it at the Constitutional Court if signed by the president. The bill limits the rise in the average monthly pension to 750 crowns in June in the next round of hikes to be triggered by...
Deputy Foreign Minister of Ukraine Yevhen Perebyinis discussed Czech Republic’s patronage of the restoration of Dnipropetrovsk region with the delegation of the Czech Republic headed by the Governmental Envoy for the Reconstruction of Ukraine Tomáš Kopečný. Perebyinis expressed gratitude for military, financial, and humanitarian assistance provided by the Czech Republic to Ukraine, in particular, within the Government program for 2023-25 framework that was adopted in October last year. “The implementation of a number of specific projects was discussed, including prospects for the interaction of two sides in the context of the Czech patronage over the reconstruction of Dnipropetrovsk region,” reads the statement by the Ministry of Foreign Affairs of Ukraine. In addition to focusing on the region, Czechia also wants to be involved in the reconstruction of specific sectors where it has know-how and experience, such as energy, transport, infrastructure, healthcare, and demining. The parties also exchanged views on a number of topical issues of the bilateral relations, including the development of the Ukrainian-Czech political dialogue as well as cooperation in Ukraine’s path towards accession to the EU. In a report issued in January, the Kyiv School of Economics estimated that as of December, the war had damaged or destroyed 149,300 residential buildings, including 131,400 private houses;...
Petr Pavel, Czechia’s president-elect, reportedly intends to meet with President Volodymyr Zelensy in April. The recently inaugurated Czech president agreed on this during a phone call with his Ukrainian counterpart Volodymyr Zelensky on Sunday, which according to Pavel’s spokeswoman was requested by president Zelensky so he could congratulate Pavel on taking office. The visit will be part of a wider diplomatic trip abroad, including to Brussels, after Pavel’s official inauguration into office on March 9. “Czech support is crucial for Ukraine in fighting against [the Russian Federation]’s aggression,” Zelenskiy tweeted. Pavel earlier said that Ukraine’s membership in NATO has to be considered after the war with Russia ends. Since the full-scale war began, Pavel has been known for his steadfast advocacy of military support for Ukraine, saying in February that Kyiv should be given any and all conventional weapons necessary for victory. Speaking with Ukrainian publication Suspilne, the retired general and former senior NATO commander said that Ukraine has “done its homework” on common values, long-term interests, and technical interoperability with the alliance. However, admitting Ukraine now, would make NATO a party to the conflict, which may lead to nuclear war, he said. Nevertheless, Pavel added that he believes Ukraine deserves to be...
Czech headline inflation eased to 16.7% year-on-year in February, reinforcing the view that surging price growth is moving past a peak as the central bank seeks to maintain stable interest rates. Inflation around central Europe has surged in the past year, more than elsewhere in Europe, as food prices have jumped alongside energy costs. Central banks in the region started battling price pressures in 2021, sooner than other European Union policymakers, and have thus ended hiking cycles even as global central banks like the ECB and U.S. Federal Reserve continue to tighten. Central Bank Policy The Czech central bank has held steady on policy since mid-2022 despite criticism it needs to do more to secure inflation returning to its 2% target. Inflation slowed in February, after hitting 17.5% in January amid repricing actions at the start of the year. Analysts in a Reuters poll had expected the headline rate at 16.6% in February. On a monthly basis, prices rose 0.6%. Signs Of Discounts Inflation “only symbolically neared the inflation target,” Banka Creditas chief economist Petr Dufek said, adding the first signs of discounts on goods were starting to appear. “Weaker demand, which is seen in falling household consumption and retail sales, should increasingly limit the scope...
After two five-year mandates, Czech President Miloš Zeman’s term in office ends at midnight on Wednesday, March 8. Zeman, who was first a member of the Social Democratic Party but later switched to the centre-left Party of Civic Rights, was one of the defining figures in Prague after the Velvet Revolution of 1989, along with his predecessors Václav Havel and Václav Klaus. But in the commentaries, there is not much mourning over his departure. He did more harm than good “His dark side far outweighed his light one. We joined Nato when Zeman was prime minister, but after that he never stopped torpedoing our Western alliances. Zeman conceived his entire presidency as representing the interests of China and Russia. … When our first post-revolutionary president died, parliament paid him tribute by saying: ‘Václav Havel did a great service to freedom and democracy.’ With regard to this outgoing president it should say: ‘Miloš Zeman endangered freedom and democracy’,” wrote Erik Tabery, editor-in-chief of Respekt. A striking but controversial personality Deník is also ambivalent about the outgoing president: “Miloš Zeman is a conspicuous personality of the post-revolutionary era. For many years he held the pen with which history was written. He did...
The Ministry of Finance has signaled that it intends to bring in more revenue from gambling. The Ministry of Finance seems intent on seeking more revenue from the gambling sector, having told media that it will implement tax changes in the sector. Finance Minister Zbyněk Stanjura is in the process of defining measures to deliver savings of Kč 70bn in the country’s budget. The Czech gambling sector is currently estimated to generate Kč 9bn per year in taxes, but Stanjura aims to increase that contribution to Kč 1bn as the government seeks ways to keep the deficit at Kč 295bn. Back in 2020, the government went ahead with the introduction of a tiered tax on gross gaming revenue, which ranges from 23-to-35 per cent. A head of that move, which applies to allow licensed products, from bingo to sports betting, drove international operators such as William Hill and GVC Holdings (now Entain) to leave the market. The exit of foreign operators left the Czech gambling sector the domain of local operators of Fortuna Entertainment and TipSport in sports betting and Sazka (Allwyn) for lottery.
The Prague-based energy company, PRE, has announced that new electricity and gas tariffs will be available to customers from March 15, which will be lower than the government’s imposed caps and substantially cheaper than the current tariffs. The company disclosed this information in a press release on Thursday. The new tariffs, named PROUD FIX and PLYN FIX, will be accessible to both new and existing customers, with a prerequisite that the prices will remain fixed until the end of 2024. The cost of electricity at the most popular distribution tariff, D02d, will be 4.74 CZK per kWh, excluding VAT. Meanwhile, customers who use electricity for heating and water heating purposes will pay 4.64 CZK per kWh for the high tariff and 4.44 CZK for the low tariff. PRE gas will be offered at 2.08 CZK per kWh, which is 420 CZK below the government-imposed caps when measured in one megawatt. “The new offer is aimed at conservative customers who prefer to have a guaranteed price for a specific duration. It also targets individuals who are apprehensive about the possibility of any future electricity price hikes,” the company stated. All major suppliers – E.ON, Innogy, Pražská plynárenská, MND and ČEZ –...
Producer prices in the Czech Republic continue to rise by tens of percent. According to data released by the Czech Statistical Office, they were up 25.5 percent in agriculture, 19 percent in industry, and 11.4 percent in construction. The prices of market services for businesses also rose year-on-year by 6.3 percent. However, the year-on-year price growth slowed down in all these groups compared to December. Compared to last January, potato prices rose by 43.1 percent, and egg prices rose by 82.7 percent. For example, in industry, the prices of electricity, gas, steam, and air-conditioned air rose by 35.7 percent, and those of coal, lignite, and lignite by 82 percent. In the construction sector, prices of materials and products consumed rose by 14.3 percent year-on-year in January. In services, employment-related prices rose by 27.6 percent, programming prices rose by 9.1 percent, warehousing and transportation support services rose by 5.5 percent, and advertising and market research services rose by 6.4 percent. “The January manufacturing price results do not look favorable as they confirm the continuation of the inflationary wave in much of the economy. While we can be pleased with the lower year-on-year figures, these are attributable to the calculation from a...
International comparisons are popular in the Czech Republic, whether it’s measuring per capita beer consumption or gross domestic product. Well-known economists and politicians also engage in this sport. Two years ago, former PM Andrej Babiš boasted that the Czech Republic had overtaken Spain in living standards, claiming, “today we are like Italy.” In terms of GDP per capita in purchasing power parity, this claim would have been true two years ago and still holds some weight today. According to the International Monetary Fund’s 2022 data, the Czech Republic ranks 35th with $48,919, Spain is in 37th place with $46,551, and Italy is in 31st place with $51,062. Japan, on the other hand, is slightly behind the Czech Republic in 36th place with $48,813. However, GDP alone doesn’t accurately measure living standards. The Human Development Index (HDI) is a more comprehensive indicator, measuring human health, educational attainment, and material living standards. The HDI ranges from zero for the least developed countries to one for the most developed. According to the United Nations’ HDI, the Czech Republic (0.889) still lags behind Italy (0.895), Spain (0.905), Japan (0.925), and even Slovenia (0.918). The Czech Republic’s score is similar to Estonia (0.890) and Greece...
On February 25, 2018, Milion chvilek pro demokracii (lit. ‘A Million Moments for Democracy’) was conceived as a petition for Andrej Babiš’ resignation from parliament, arguing that someone under criminal investigation should not be allowed to hold the position of Prime Minister. Although they fell short of their goal for one million signatures, the organization has continued to maintain a strong civic presence within the Czech republic, urging for greater accountability in government and greater civic participation. They are predominantly funded through private donations and fundraisers. We met Hana Strašáková, spokesperson for Milion chvilek pro demokracii. “Over the five years of our activity, we have gathered know-how on how to talk to those who do not vote for democratic political parties and who do not agree with Million of Moments. … Our goal will undoubtedly be to unite all the people who care about the future of our country. And that will undoubtedly require a greater focus on non-urban citizens.” Earlier this year, Petr Pavel was elected President of the Czech Republic after two rounds of voting,receiving 35.40% of votes in the first round and 58.31% in the second. Prior to being elected President, Petr Pavel served as the Chairman...
Czech housing transactions dropped by 50% last year to a 10-year low, as soaring inflation, high-interest rates and the war in Ukraine scared buyers, data from the Czech Banking Association (CBA) and Dataligence showed on Wednesday. Dataligence CEO Milan Rocek said demand culminated in late 2021, with the market short of apartments on offer, but the start of Russia’s invasion of Ukraine in February 2022 brought an abrupt change. “Higher energy prices, a sharp rise in inflation, that all changed people’s mood,” he said. “This was multiplied by the growth of mortgage interest rates. The real estate market practically froze in the second half because of that.” The number of new mortgages fell to a 20-year low last year while the volume was the lowest in a decade, the survey said. New mortgage volumes for the full year, excluding refinancing, dropped by 57%, CBA had reported earlier, as official interest rates soared to 7% last year from 0.25% the year before. The CBA has reported an 82% year-on-year drop in new mortgages in December alone. Despite the drop in volumes, prices gained as supply continued to be tight. Prices of older apartments reached a peak around mid-2022 but still showed...
Fresh from his visit to Ukraine, US President Joe Biden will rally NATO’s eastern allies in Poland on Wednesday (22 February), a group of countries in which most – but not all – are strong supporters of military aid to Ukraine. Biden used the trip to rally support for Ukraine as the war enters its second year, with no end in sight, and it came on the same day as a speech by Russian President Vladimir Putin in which he accused the West of seeking Russia’s destruction and dangled the threat of nuclear war. Before returning to Washington on Wednesday, Biden will meet leaders of the Bucharest Nine, the countries on NATO’s eastern flank, to reaffirm support for their security. The ‘Bucharest Nine’ (B9) was founded on 4 November 2015 in Bucharest, at the initiative of the President of Romania Klaus Iohannis and the President of Poland Andrzej Duda during a bilateral meeting between them. It gathers the Presidents of Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Montenegro, North Macedonia, Poland, Romania and Slovakia. All joined the Western military alliance after being dominated by Moscow during the Cold War, and most, with the notable exceptions of Hungary and Bulgaria, are now among...
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